Industrial intelligence and supply chain resilience: an inverted-U relationship moderated by virtual agglomeration

Drawing on the Efficiency – Fragility Paradox, this study identifies a robust inverted-U relationship between Industrial Intelligence (II) and Supply Chain Resilience (SCR). While II initially enhances SCR, its marginal effect turns negative beyond a structural threshold driven by technological lock-in and systemic fragility inherent in high-integration automation. Using Chinese provincial panel data (2012–2022), fixed-effects models show that Virtual Agglomeration (VA) acts as a critical compensatory mechanism. VA does not merely weaken this negative marginal effect but shifts the optimal II level upward, enabling a calibrated form of intelligence embedded in flexible external digital ecosystems. These findings offer valuable insights into the nonlinear impact of II and the compensatory role of VA in building resilient supply chains.